Bill English and Paula Bennett this morning announced plans to sell up to 2,500 Housing New Zealand Corp state houses in Christchurch to community housing providers in a major expansion of the Government's troubled Social Housing reforms.

Plans to sell state houses in Invercargill and Horowhenua have fallen over, but the biggest tranche of 1,124 houses to be sold in Tauranga is on track.

English announced the plan at an event in Christchurch. He said the announcement signalled the beginning of the 'market sounding' phase of the commercial process.

“In Christchurch, Housing New Zealand has done an excellent job of repairing and rebuilding its earthquake-damaged stock but one in five of those properties are under-utilised," English said.

"There is now an opportunity for a private provider to renew, reconfigure and develop the properties to better match demand, and to finish earthquake remediation work,” he said.

The plan is for a single sale of between 2,000 to 2,500 HNZ properties, mainly in Bryndwyr, Riccarton and Shirley to a Community Housing Provider (CHP), while Housing NZ would continue to own and manage up to 3,900 properties in other areas of the city. It is thought one of the state houses being sold is the one John Key grew up in.

Bennett said any successful CHP buying the homes must show they can improve the quality of services to tenants.

“As we have said of other transfers, our bottom line is that tenant rights will remain the same and tenants will continue to be housed for the duration of their need," she said, adding any successful bidder would enter a 25 year contract with MSD. The houses cannot be sold and must remain in social housing unless the Government agrees otherwise.

“They’ll also need to prove they have strong community links with social service providers, and they must be New Zealand registered community housing providers."

English and Bennett said there would be a market sounding session early next year.

Phil Twyford called for the abandonment of the Housing NZ sale programme on Tuesday after the Government announced the joint sale of Housing NZ homes and Horowhenua District Council homes would not go ahead because Iwi had not settled their Treaty claims and would not agree to the sale.

RSE quota lifted by 1,000

Michael Woodhouse and Anne Tolley announced the Government had increased its quota for the Recognised Seasonal Employer (RSE) scheme for short term migrants working on vineyards and orchards by 1,000 to 10,500 for the 2016/17 season.

The decision came a day after figures showing net migration rose to a record high 70,300 in the year to October and after Winston Peters described the National-led Government's policies as "migration madness."

Tolley and Woodhouse said the horticulture and viticulture industry was the fourth largest export earner and needed the extra workers to keep growing.

“The industry has forecast an additional 2,500 workers will be needed for the upcoming season,” Woodhouse said.

“The increase of 1,000 RSE workers shows the Government is committed to enabling the industry to continue to grow and maximise export returns, while ensuring jobs aren’t being taken from New Zealanders," he said.

Tolley and Woodhouse said the increase was made on the understanding that the industry continued to maximise opportunities for New Zealanders, particularly in regions with relatively high unemployment.

Tolley said around 5,000 beneficiaries had taken part in the New Zealand Seasonal Work Scheme and a "significant number" had not gone back on the benefit.

“In 2015, MSD placed over 4,000 people in the agriculture industry across New Zealand, which includes the horticulture and viticulture industries. HortNZ figures show that this sector employs around 60,000 people annually," Tolley said, adding MSD was developing other new initiatives to increase the number of New Zealanders working in the industry.

The RSE scheme was launched in April 2007 with a cap of 5,000 workers under the then Labour Government led by Helen Clark when unemployment was under 4%, but the cap was lifted to 8,000 in October 2008 when unemployment was rising and was lifted again in 2014 from 8,000 to 9,000, and then again from 9,000 to 9,500 in December last year when unemployment was over 5%. The workers come mostly from the Pacific Islands.

Unemployment is currently 4.9%, while the under-utilisation rate is 12.2%. The number of unemployed actually rose by 1,000 to 128,000 over the last two years and the number of 15-24 year olds who were 'Not in Employment, Education or Training' (NEET) rose by 3,000 to 74,000. The NEET rate has been unchanged at 11.1% over the last two years. The under-utilisation rate, which includes those people in part time jobs who want more work, fell in the September quarter to 12.2% from 12.7% in the June quarter, but is unchanged from two years ago. There were 329,000 under-utilised people in the September quarter.

The Reserve Bank has warned that record high net migration, particularly of working age people, was moderating wage growth in an economy growing at almost 4%.

'Reckless migration policy'

“We have tens of thousands of young New Zealanders who can’t get a job, congested roads, a housing crisis, over-burdened hospitals and schools and yet the government persists with a madcap policy that is not working in the best interests of all New Zealanders," Peters said.

“The high level of low-skilled workers coming to New Zealand, including international students, has undermined working conditions and put a lid on wages," he said.

"It is clear that the government’s only strategy for the 2017 election is bloat the economy with consumption and perpetuate the myth that consumption growth equals real GDP per person growth. It doesn’t, and as the one political party that understands that we intend to blow their political strategy clean out of the water.”

Meanwhile, Peters reacted to comments from construction firms that at least 1,000 foreign workers would be needed to rebuild the road and rail connections through Kaikoura. He said New Zealanders should be used to rebuild the roads and rail, "not cheap foreign labour."

"Recruitment and immigration companies who make big money bringing in foreign labour perpetuate the myth we don’t have the workers and labour when we do," Peters said.

“A skilled structural fabricator/welder in Christchurch recently told NZ First that foreign workers in the Christchurch Rebuild were being paid ‘very low wages’ which was driving down wage rates for Kiwis," he said.

Peters said the Government's increase in the RSE scheme showed it had failed to get New Zealanders work ready and trained, although he did not specifically oppose the increase.

"The seasonal workers’ scheme fills a valuable slot so New Zealand’s crops are harvested, but we must do more to pick up Kiwis who are out of work and lead them to these opportunity through training programmes that help them to be work ready," he said.

Tweets of the day:

Robert Peston after the British Government's version of HYEFU overnight:

So to be clear, Brexit impact on public finances is a deterioriation of £220bn by end of parliament. Worse than feared